I have a two-part strategy for saving money that helped me save more than $17,000 last year.
I didn't do it by cutting costs mercilessly and living on rice and beans to pinch pennies. I also didn't get any kind of significant windfall.
I save for retirement by contributing a portion of my pretax salary to my 401(k), and I save for current goals by making automatic deposits into a high-yield savings account.
See Business Insider's picks for the best high-yield savings accounts »

I've been writing about personal finance for more than three years and I'm in the process of becoming a certified financial planner (CFP), but I'm still human — I overspend and overthink on a regular basis. If there's anything I learned in 2019 when it comes to managing my money, it's the everlasting power of solid, foundational habits.
Thanks to systems I initially set up in 2017 and 2018, I'm proud to say I was able to save more than $17,000 in 2019. This wasn't thanks to any type of windfall other than a modest tax refund, nor did I live on rice and beans to pinch pennies ... I simply stayed consistent.
I automatically save in my 401(k) and a high-yield savings account
My strategy for saving money is two-fold. I've been contributing a portion of my pretax salary to my 401(k) at work since I started, and I direct a portion of my after-tax paycheck directly into a high-yield savings account to pay for the things and experiences I want sooner than retirement. The common thread? It's all done automatically.

By saving money off the top, I'm able to budget in reverse. My retirement fund and of-the-moment savings goals (this year it was my emergency fund and travel fund) are treated like the rest of my expenses — the money is taken out of my pay first, before I can spend the cash on expensive dinners or unnecessary Target runs. Whatever is left over in my checking account after all my fixed expenses are covered is essentially disposable income.
It's worth noting that a big reason why I'm able to save so much is because I have no major debt obligations. If I had high-interest consumer debt to pay down, I'd strongly consider redirecting that money to make extra payments before saving for a vacation.
But that's also precisely why I don't have short-term debt — I was able to get an emergency fund in place before getting hit with any unexpected bills or emergencies. Now I can draw from that savings account when I need to instead of relying on a credit card or loan.
Consistency and thoughtful adjustments are key
All told, I saved about $5,500 in my high-yield savings account this year — $1,500 of which I later moved into a new Roth IRA — and contributed nearly $10,000 to my 401(k). But that's just the money that came from me.
I earned an additional $143 in interest in my high-yield savings account and a whopping $2,300 from my employer's matching contribution in my retirement plan. But my 401(k) isn't just a savings account. Every dollar I contribute gets invested, growing exponentially over time — so I ultimately "saved" much more toward my retirement goal in 2019.
While the foundation of my savings strategy remained the same throughout the year, I did make a few small, but crucial tweaks.
1. I bumped up my 401(k) deferral rate right after I got a raise so that my contribution would increase before I even had a chance to see a much bigger paycheck.
2. I moved $1,500 from my high-yield savings account into a Roth IRA to put my money to work in investments after I realized I was holding more cash than I needed.
In the end, I learned that consistency is key, but so are thoughtful adjustments. I can't say this will be my savings strategy forever, but I'm excited to see where it will bring me in 2020.

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A 401(k) is an employer-sponsored retirement plan that makes investing simple.
To invest in a 401(k),...

A 401(k) is an employer-sponsored retirement plan that makes investing simple.
To invest in a 401(k), you need to make three decisions: how much of your salary you want to contribute, which funds you want to invest in, and what percentage of your contributions should go toward each investment.
Generally, it's best to avoid funds with expense ratios above 1%, unless your company offers a contribution match that's higher than the fee.
You can change your contribution rate and manage your investments at any time through your account on the plan provider's website.
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Though it's synonymous with retirement savings, the 401(k) plan is the best way to start investing, whether you're in your 20s or your 40s.
A whopping $6.2 trillion was held in 401(k) plans by March 2020, accounting for nearly one-fifth of all retirement assets in the US, according to the Investment Company Institute.
401(k)s make investing simple by directing part of your salary into an investment account and paring down investment options.
How to invest in a 401(k)
1. Find out if you've been automatically enrolled
Many companies have an auto-enrollment feature in their 401(k) plans. Unless an employee opts out or changes their deferral rate, a predetermined portion of their pretax paycheck will be contributed to their 401(k). The default contribution rate varies depending on the company's plan specifics, but typically ranges from 2% to 5%.
To find out if you're enrolled in your company 401(k), check your pay stub or contact your human resources team.
2. If not, enroll now
If you're not already enrolled, your human resources team can give you the instructions or forms you need to do so.
3. Find out if you have a company match
Ask your human resources team or check the 401(k) plan documents to find out if your company offers an employer contribution match and exactly how it is calculated.
An employer match is free money. To qualify to get the free money, you'll need to defer some of your own salary into your 401(k). For example, an employer may promise to match 100% of its employees' contribution, up to 3% of their salary. That means if an employee who earns $60,000 a year contributes 10% of their salary ($6,000), the employer will contribute $1,800 (3% of $60,000) for the year.
Minimally, many financial experts recommend contributing enough money to your 401(k) plan to qualify for your employer match before turning your attention to other tax-advantaged retirement accounts.
Are you saving enough for retirement? Find out with this calculator from our partners:
4. Understand your company's vesting schedule
Any contributions you make to a 401(k) are yours to keep, though you won't be able to access the money before age 59 and a half without incurring a penalty and/or paying income tax.
That said, any contributions your employer makes to your 401(k), including matches, may not be yours right away. Your 401(k) plan's vesting schedule outlines exactly when your employer's contributions will be yours. You can contact your human resources team to find out about your company's vesting schedule.
Most 401(k) plans have either cliff vesting or graded vesting. A cliff means that contributions made by the employer won't be the employee's to keep until they've worked at the company for a specific period of time, usually two or three years. Graded vesting means that a specific percentage of the employer's contribution vests each year the employee is at the company.
For example, your company's 401(k) plan may have four-year graded vesting — after one year of service, 25% of their contribution is yours; after two years of service, 50% of their contribution is yours; after three years of service, 75% of their contribution is yours; and finally, after four years of service, 100% of any past and future contributions are yours to keep and invest in your 401(k).
If you leave the company before your vesting period is up, you'll lose any portion of your employer's contribution that isn't already vested.
5. Choose your deferral rate
A lot of people get caught up deciding how much to contribute to their 401(k), but anything is better than nothing.
The good news is your deferral rate — the amount of your paycheck that's deferred from income taxes — is not set in stone. Most plans will allow changes to the deferral rate (also called a contribution rate or savings rate), at any time, though it could take up to a month to go into effect.
In 2020, the IRS allows employees to contribute $19,500 to a 401(k), plus an extra $6,000 for folks over 50. To max out your 401(k) this year, you'd need to contribute about $812 every paycheck (assuming 24 bi-monthly paychecks over the course of the calendar year).
6. Choose a beneficiary
You'll also need to name a beneficiary — the person who would inherit your 401(k) in the event of your death. It can be changed later if needed.
7. Browse investment offerings and pay attention to fees
The investment options in a 401(k) are carefully selected by the employer. Most 401(k) plans offer between eight and 12 investment options, which can be a mix of mutual funds, stock funds, bond funds, and even annuities.
There are two general types of fees you will see in your account:
Account management fee charged directly by the 401(k) plan provider
Fee charged by the mutual funds and ETFs in your 401(k) account (expense ratio)
If you're investing in your 401(k), the account management fee is unavoidable. If your provider is charging a management fee above 1% of your account assets, you may consider directing your savings elsewhere, such as an IRA with lower fees. However, it could be worth contributing if your employer offers a match that is higher than the provider's management fee.
Most mutual funds charge a management fee, too. This is listed on each investment fund as the expense ratio, or the fee rate as a percent of assets. Again, look for funds with an expense ratio below 1%, otherwise the fees could start eating into your returns.
8. Choose your investments
Aside from fees, there are two important factors to consider when choosing specific investments: your time horizon (how many years you have until retirement) and your risk tolerance (how much risk you can withstand).
If you have decades to invest before you need retirement income and are fairly risk tolerant, you may choose a fund with more stocks, as they're considered riskier than bonds.
Some 401(k)s offer "all-in-one" target-date funds that automatically rebalance to fit into your time horizon. You may see them labeled as "Target" or "Retirement Fund," plus a year. For example, a "Target 2040" fund is made up of a blend of investments that assumes retirement in the year 2040, so investments will need to be as conservative as possible by that time. You don't have to choose a target-date fund that matches your actual retirement age.
9. Choose how much of your contributions should be invested in each fund
As you choose your specific investments, you'll decide how much of your contributions will go toward each investment, usually expressed as a percentage.
If you only choose one fund, 100% of your money will be invested in that fund. If you create a portfolio with three different funds, you can decide what percentage of your contributions will go toward each fund.
10. Log on to your account through your plan provider's website to periodically increase your contribution rate and manage investments
You can change your contribution rate and manage your investments by logging on to your account through your plan provider's website (e.g. Vanguard, Fidelity, etc.).
Most experts suggest increasing your 401(k) contribution rate at least once a year, or each time you get a raise.
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A SIMPLE IRA is a tax-deferred retirement savings account.
It's similar to a 401(k) but...

A SIMPLE IRA is a tax-deferred retirement savings account.
It's similar to a 401(k) but it's designed for small businesses with fewer than 100 employees.
It has different contribution limits and different employer-contribution requirements than a 401(k).
Use Blooom to analyze your 401(k) today and see how you can grow your retirement savings »
Understanding the world of retirement savings accounts can be intimidating, but of all the options available, the SIMPLE IRA seems to be the one that most folks know the least about.
That makes total sense, given that this account is one of the newer types available and applies to fewer people than, say, a traditional IRA or a 401(k).
But if you're eligible for its services and equipped with an understanding of its perks, the SIMPLE IRA can prove incredibly beneficial, so read on for all the information you need to make the most of this innovative account.
What is a SIMPLE IRA?
The SIMPLE IRA is a tax-deferred retirement savings plan established by the Small Business Job Protection Act of 1996. As you've probably gathered from the capitalization, the name is an acronym — it stands for Savings Incentive Match PLan for Employees. (And of course, IRA stands for "individual retirement account.")
These accounts are designed expressly for small businesses with 100 or fewer employees that don't offer a qualified retirement plan like a 401(k) or a 403(b), and are run through participating financial institutions.
For ease of use, the SIMPLE IRA requires less paperwork than its more elaborate cousins, and has aspects drawn from both traditional IRAs and employer-sponsored accounts.
How does it compare to other retirement accounts?
Just like with the traditional IRA, contributions to the SIMPLE IRA are tax-deferred, meaning you won't be taxed on the funds until it comes time to withdraw them. Additionally, employees can contribute to the accounts themselves, and always maintain full ownership of the contents of their SIMPLE IRAs.
The SIMPLE IRA has a great deal in common with the 401(k), like the fact that employers can also add to the account in the form of matching contributions. But the small business-centric accounts actually take this facet one step further by making these contributions a requirement instead of an elective that varies from company to company.
Employers that offer a SIMPLE IRA are presented with two contribution options — they can either match contributions of up to 3% of an employee's annual salary, or offer a 2% nonelective contribution. (The latter option meaning that your company will automatically contribute that 2% amount even if you, the employee, don't make a contribution of your own.)
Your employer is obligated to contribute to your SIMPLE IRA every year until the account is terminated, but it's worth noting that they can change their contribution decision at any time. They are required to notify you of any changes, however, so make sure you're up to date on your office's policies so you can make the most of your retirement savings.
Also, unlike a 401(k), a SIMPLE IRA can't necessarily be rolled over into a traditional or Roth IRA immediately after your departure from the company. This transition can eventually take place, but it requires a two-year waiting period from the time the account was opened. So if you left your job within that two-year window, you'll have to wait it out before rolling over your SIMPLE IRA.
Additionally, Simplified Employee Pension (SEP) IRAs and traditional IRAs cannot be rolled over into SIMPLE IRAs.
Do I have to choose one or the other?
Yes and no. You don't have to choose between a SIMPLE IRA and an individual retirement account like a Roth or a traditional IRA.
But since these accounts are intended specifically for small businesses that don't provide employee-sponsored retirement accounts, if your employer offers a 401(k) or similar plan, you cannot also take advantage of a SIMPLE IRA.
Who is eligible for a SIMPLE IRA?
There are just two requirements to determine SIMPLE IRA eligibility. The first is that you must work for a small business — typically defined as one that staffs 100 or fewer employees.
The second is that you must have earned at least $5,000 from your employer in each of the previous two years, and expect to earn at least $5,000 in the current year.
How much can I contribute to my SIMPLE IRA?
Like many other retirement accounts, the IRS places annual limits on employee contributions to SIMPLE IRAs.
For 2020, that limit is $13,500, which is significantly higher than the maximums placed on individual retirement accounts, but lower than the cap on 401(k) contributions. Also, those aged 50 and over are granted an additional catch-up contribution of $3,000, bringing their yearly maximum up to $16,500.
When can I withdraw my money?
While you can theoretically withdraw funds from your account at any time, you should do your best to wait until age 59 1/2 to take the first disbursement from your SIMPLE IRA. That's because unless you qualify for an exception, disbursements taken before that point are subject to an additional 10% tax. (Which comes on top of the funds being taxed as income.)
Even more crucially, that fine increases to an additional 25% tax if you dip into the funds within the first two years of enrollment in your SIMPLE IRA. (A time frame that begins with your employer's first contribution to your account.)
Because these early withdrawal penalties are so steep, it's important that you're only setting aside those funds that you're comfortable parting with long-term.
How can I invest?
For employers, establishing a SIMPLE IRA for your workers is as simple as filling out a form — Form 5304-SIMPLE if you want employees to be able to choose the financial institution where their accounts will live, or 5305-SIMPLE if you wish to make that choice yourself.
And for employees, participation is as simple as filling out a SIMPLE IRA adoption agreement at your place of work. Once you're enrolled, you should be able to choose one of the investment options on offer through the selected financial establishment, where your money can grow steadily until it's time for retirement.
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A growing net worth is a good sign of financial progress, and it might not...

A growing net worth is a good sign of financial progress, and it might not be as hard to accomplish as you think.
Automatically putting money in a high-yield savings account, increasing your retirement contribution, and opening a brokerage account can all boost your wealth.
By making smart choices with even small amounts of money you have today, you'll set yourself up for big changes over the long term.
Read more personal finance coverage.
If you're starting 2020 with high hopes for your money, consider this: Building wealth is about making incremental progress, day after day, year after year.
Big wins — like getting a raise — are wonderful, but small wins — like choosing the right investment or savings account — are even better, because you have total control. The seemingly tiny habits you start and decisions you make today determine where you'll be in the future.
With just $100, you can set yourself on a path to a rich life almost instantly. Here are a few ideas to get started increasing your net worth:
1. A high-yield savings account
A good savings account can do much more for your wealth than you may realize. Even though interest rates are down compared to early 2019, a high-yield savings account can still help you earn up to 20 times more on your cash than a traditional savings account. That means you could earn hundreds of dollars in interest for simply storing your money in the right place, completely risk-free.
Now, just opening a new savings account won't make you rich. You need to save regularly to meaningfully boost your wealth. Consider an account like CIT Bank's Savings Builder, which helps create momentum by rewarding you with its top APY if you set up an auto-deposit each month.
2. A meeting with a financial planner
Most fee-only certified financial planners charge between $100 to $300 for a one-time session, but many offer an initial no-cost consultation. Whether you meet once or set up an ongoing engagement, you'll be able to get specific guidance on any aspect of your financial situation, including budgeting, retirement, investing, education planning, and estate planning.
According to a Northwestern Mutual survey, people who work with a financial adviser are more likely to know how to balance spending now and saving for later; set specific goals and feel confident that they will achieve those goals; and have a plan in place to weather economic ups and downs.
SmartAsset's free tool can help find a financial planner near you »
3. An increase to your retirement contribution
Retirement may be decades away for you, but the best time to start building a nest egg is today. Whether you contribute to an employer-sponsored retirement plan like a 401(k) or tax-advantaged Roth IRA at a robo-adviser or brokerage, increasing your monthly or per-paycheck savings by $100 can have a big impact.
Of course, there's no guarantee your investments will gain value in the short term. It's nearly impossible to predict where the market will be a year from now, but waiting on the sidelines until the "right" time is a mistake none of us can afford to make. As long as you're thoughtful about your asset allocation, risk tolerance, and time horizon, you don't have anything to worry about.
4. An investment in a brokerage account
If you have money you want to grow for goals that are closer than your golden years and you've paid off any high-interest debt, it could be a good time to invest in the stock market.
Despite popular belief, you don't need a ton of money to get started. For beginners, an online investing app like Betterment can keep your costs low and guide you toward investments that match your risk tolerance and your goals.
Again, there's no telling whether your investments will gain or lose value over the next year, but if you don't invest at all, increasing your net worth is going to be a far more difficult task.
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